Suspected Fake Goods Sold through E Commerce Websites may be reported here

Today, CNN IBN News carried a report on sale of fake goods on E Commerce platforms at heavy discounts. E Commerce platforms such as Flipkart, Amazon, Snapdeal and ShopClues were highlighted as platforms in which fake sellers are selling sports goods such as Footballs. The presentation of the program was clearly to blame the online platforms as instruments of violation of intellectual property rights.

The program was led by one of the “Brand Protecting service” companies. During the program, it was stated that many test purchases were made and fake footballs in a well known brand name were recovered by conducting raids on stockists at Meerut.

There was one firm voice in the panel of speakers which was from the CEO of mouthshut.com which was drowned by the anchor who was not interested in any view other than what she had set to hear. She was one of the new breed of inexperienced but arrogant journalists who invite specialists as guests but think that the anchor knows more than anybody else.

What this CEO was trying to make out was that the problem of “Fake Goods” was a problem which also applies to offline market places and the program should not appear to project online market places as the villains. I do agree with this view which was not properly projected by the anchor.

At the same time, I also agree that the online market places should exercise better due diligence in selection of merchants and also keep advising the prospective buyers to look out for fake buyers and report it to them.

Most online market places offer “Return” options with no questions asked and hence dissatisfied customers have a remedy to tackle “Quality” issues. Some online market places run “Rating of Dealers” and “Product Reviews” which try to provide information to the buyers.

Finally, coming to the legal issues,

I believe that the present laws under Section 79 of ITA 2000/8 are good enough to bring “Negligent” market places to book and make them responsible for selling of spurious goods. But the argument and suggestions should be on the basis of “What Due Diligence” is required and whether Flipkart of Amazon are following the best practices. There is certainly no reason for new laws to be framed just to tackle E Commerce issues.

The marketing platforms should look at their systems on how to ensure that bad dealers are identified and eliminated without discouraging small traders without an offline brand image also using the online platforms as instruments of marketing their products.

There are many success stories of unknown individuals harnessing the global marketing opportunities provided by the Flipkarts and Amazons and this should not be discouraged.

I feel that some of the products sold by small traders are as good as branded items and the brand owners may be making unfair trading profit which should be discouraged.

For this purpose, every online platform should offer their small unknown dealers to sell goods under “Unbranded” category and where possible under a “Verified” tag where the platform takes some responsibility to set quality parameters and test the products before they tag them. There could be different rating systems that can be tagged along so that the buyer knows from whom the product is being delivered and serviced before making the buying decision.

Since there are lakhs of products being sold, it may not be practical for the market place to provide such verification tag to all the products but an attempt can be done in this direction with the help of consumers and consumer organizations. There are many individuals who voluntarily test products and put out YouTube videos. The online platforms can tag the product reviews to such online reviews and incetivize feedback on products from genuine customers.

In fact, mouthshut.com itself is a platform which many online buyers check before making a purchase. May be there could be more of such online review posting mechanisms so that they provide unbiased views on a product sold by a market place and donot become platforms that can be compromised by the product sellers.

The effort therefore should be to have more “Consumer Awareness” and “Consumer Empowerment options” supplemented by a robust grievance redressal mechanism.

The Consumer awareness option will work if used before a purchase. In case the buyer has problems after the purchase, there should be a proper grievance redressal mechanisms other than the “Free Return” option if required. Such options should be only by ODR mechanism (Online dispute resolution mechanism). The Consumers who really have a problem that has to be resolved beyond the “Return” option need to ensure that there is proper “Evidence” of what they bought in. It is in this context that they need to explore the use of services like “CEAC-EDB”. (Evidence Drop Box Service of CEAC.IN)

Unfortunately the program on CNN IBN did not have a single word on what can be done by the online market places to improve the consumer interest.

The Government of India as I understand has issued some instructions on product presentation which will come into effect in the next few months which include guidance on what information needs to be presented as a product label.

Additionally, all “Branded Product Suppliers” who are concerned about the online market places being misused should provide an online reporting system where consumers can report “Suspected Fake Product” sold on any platform so that they can respond quickly and stop the sales quickly.

In a bid to promote this culture, a free, single window service would be provided from CEAC-EDB that if any consumer reports a “Suspected Fake Product sold on an E Commerce Website”, CEAC will forward the report to the concerned Brand owner…

-provided the brand owner registers his interest to receive such reports from consumers.

(I invite the brand owners to first send an designated e-mail through which CEAC can deposit the Suspected Fake Product Report. If they donot respond and provide a contact e-mail, it will be difficult for CEAC-EDB to continue this offer.)

Once a report on a suspected fake product report is received by CEAC from a consumer, the consumer would be asked to provide supporting information before it is registered and action initiated. Full process for this would be developed in due course and would be posted on CEAC website and also informed to the complainant through e-mail.

The fact that a “Suspected Fake Product Report” was sent to the brand owner would be kept on record and if the brand owner does not reply and take counter action, it may be deemed as “Lack of Due Diligence” by the brand owner and demonstration of “Forbearance” in any trade mark related disputes that may follow.

May be more is required to be done in this direction rather than media simply projecting that the E Commerce websites are the villains who engage in “Fake Product Marketing”.

If the online platform adopts meaningful due diligence and the consumer is properly empowered with pre-sale information and post sale service, then E Commerce the problem of fake goods sale can be effectively tackled.